NAB - employee share purchase plan

[Ken]

I work at the NAB.

They have introduced a share purchase plan which allows employees to pick up $1500 worth of nab shares through salary sacrfice.

This is going to be a regular thing, where every 1/4 the NAB may allow this to happen.


The share purchase plan will allow Nab employees to pick up shares at a 5% discount to the market value.

The shares will be held in a treasury account.

Roughly around 40 shares I guess is $1500 worth.

I dont know how this will effect the NAB share price, but it may increase the companies lending capacity shares in a treasurey. Will mean they can lend the stock out etc.

From all reports the NAB. I am participating. Long term savings plan really. Better than adding to super because you can touch it before 65.

 

[theasxgorilla]

I used to work at Hewlett Packard and they had a similar thing, only it was a 15% discount every 6 months. The catch was that you couldn't sell your shares for 3 weeks after they'd been allocated. But the other upside was that there were 3 formulas they used to calculate the purchase price, and they always took the lowest of the 3.

So, at the end of every 6 month period you had 3 weeks of market exposure. And in order to erase your gains the market would have to move 15% (+ the difference between your share purchase price and the market price on the last day of the 6 months) against you in those 3 weeks. Even during the post dotcom boom days that kind of a move in a technology blue chip like HP was not at all likely. Plus you would have to have been unlucky enough for that event to occur during those 3 weeks.

I didn't know about technical analysis at the time but looking back at it you could possibly even apply some trend filter which determined whether you sold immediately at the end of the 3 weeks or let it ride.

In any case for me it was a no brainer, I pumped as much as I could into it every month (10% of my salary, gross).

Ironically, many other people dropped out of this plan. You see previously HP offered a 2-for-1 deal, where by you had to conditionally hold your shares for 2 years and for every 2 shares you held you would receive 1 free share. People obviously saw this as a 50% gain in 2 years, or 25% p.a. plus any appreciation in the shareprice while they were waiting. And when you took that away from them and replaced it with a measily 15% discount every 6 months they thought it wasn't worth it. I tried to explain to people on countless occasions that 15% every 6 months with 3 weeks market exposure equated to 30% p.a. for at worst 6 weeks market exposure.

I actually just applied for a job at HP in Denmark...I hope they haven't changed this plan!!!

 

[Ken]

The NAB share purchase plan is not overly beneficial really. As you can only purchase $1500 worth, but i am considering a margin loan of 1000 shares for NAB at around $38.50

As a long term hold I still reckon they are a good one.

1000 NAB shares in 5 years...